Ethereum, does it make or break?  Analysis of September 13, 2023

The price of Ethereum has entered a corrective phase since $2,700. Let’s take a look at the future prospects for ETH.

Status of Ethereum (ETH)

As detailed in the January 11 analysis, Ethereum marked a new high. It reached $2,700 before starting a bearish movement. Ethereum dipped below the 38.2% Fibonacci zone (taken from the ATH) before falling just above its daily support at $2,150. The medium and long term trend for Ethereum remains bullish. However, the break of this support could compromise the short-term trend of the token. At the time of writing, Ether is trading around $2,200. These latest bearish movements have taken its price below the 50-day moving average. This development suggests the possibility of a trend reversal, thus encouraging investors to be extra vigilant.

As for the oscillators, they are currently below the midline. This pattern could suggest that Ethereum is currently in a state of oversold. From an optimistic perspective, this could suggest that it is undervalued. However, taking a more pessimistic perspective, this could be interpreted as a sign that the cryptocurrency’s momentum is turning bearish. Namely that the existence of a divergence between the price of Ethereum and its oscillators could reinforce this hypothesis.

ETH/USD daily chart

The current technical analysis was carried out in collaboration with Elie FT, a passionate investor and trader in the cryptocurrency market. Today trainer at Family Tradinga community of thousands of own-account traders active since 2017. You will find Lives, educational content and mutual assistance around the financial markets in a professional and warm atmosphere.

Focus on derivatives (ETHUSDT)

Open interest for Ethereum has suffered a notable drop of almost 15% since Monday, January 22. This drop represents a withdrawal of more than $700 million from ETH/USDT perpetual contracts. Of these withdrawals, more than $60 million were forced. Although these amounts may seem significant, their impact on the market requires a more nuanced analysis. When compared to the evolution of the price of ETH in relation to its open interest, it appears that the latter remains more stable than the price of ETH itself. This observation could indicate that the entry and exit of traders into the market is not particularly high, or that new traders enter the market at the same rate as others leave. Thus, this situation opens the way to various interpretations, such as a period of indecision on the market, a possible accumulation of orders, etc.

Open Interest ETHUSD
Open Interest ETHUSD

The Ethereum liquidation heatmap shows that the cryptocurrency recently reached a significant liquidation zone, located between $2,200 and $2,150. Currently, the price appears to be stabilizing in this area, indicating a period of uncertainty among investors. If the price fails to sustain above this latest level, the next significant liquidation zone below its price is around $2,000. Above the current price, the $2,500 zone is also one to watch. Price approaching these levels could result in a massive triggering of orders, increasing the possibility of a period of heightened volatility on Ethereum. These areas therefore represent crucial points of interest for investors.

ETH/USDT Liquidation Heatmap (3 months)
ETH/USDT Liquidation Heatmap (3 months)

Hypotheses for the price of Ethereum (ETH)

If the price of Ethereum remains above $2,200 – $2,100, we could anticipate a bullish continuation up to the $2,400 level. The next resistance to take into account, if the upward movement continues, would be the back high, i.e. $2,700 and above, if this level is crossed. At this stage, this would represent an increase of more than +25%.

If the Ethereum price fails to stay above $2,200 – $2,100, we could envisage a return to $2,000. The next support to consider, if the bearish movement continues, would be at the $1,900 levels. At this point, that would represent a drop close to -13%.

Conclusion

After marking a new high, Ethereum entered a corrective phase, taking it towards its former daily resistance. Do we owe this drop to the postponement of the decision on Ethereum spot ETFs? What is certain is that it will be crucial to carefully observe the price reaction at the different key levels to confirm or refute the current hypotheses. It is also important to remain vigilant against potential “fake outs” and “market squeezes” in each scenario. Finally, let us remember that these analyzes are based solely on technical criteria and that the price of cryptocurrencies can also evolve quickly depending on other more fundamental factors.

Maximize your Tremplin.io experience with our ‘Read to Earn’ program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.

Similar Posts